Compliance is a key concern for organizations in all industries, across the board. Today, businesses need to stay on top of a wide range of legal and regulatory requirements to avoid penalties or damage to their reputation. With the increasing complexity of the regulatory landscape, having one centralized contract management system will reduce the hassle of consistently ensuring compliance.
How Contract Management Systems Help Ensure Compliance
CMS software can differ from one software provider to another. Some offer more complex features such as template drafting and automation, while others can be limited to signatures and execution. For example, Contra by Lexzur offers everything you need to automate and manage legal documents – in one workspace.
- Template Drafting:
Generate and automate repetitive contracts. draft contracts from scratch or using configurable templates that auto-populate your contract in seconds. organizations can ensure consistency in contract language and terms, which can help with compliance. Configurable templates can be designed to include required clauses or terms that are compliant with relevant regulations and best practices.
- Redlining & Communication:
Negotiate and collaborate on legal documents in real-time using embedded integrations with popular collaboration tools. keep secure records of all communication in one centralized space. Real-time collaboration and communication between parties can help ensure that contract terms are negotiated and agreed upon in a transparent manner. This can help with compliance by ensuring that all parties have a clear understanding of the terms and can help prevent disputes that may arise from misunderstandings.
- Approval & Signature Centers:
Design your own secure, permission based, approval and signature centers to have contracts automatically routed to the next stage in their lifecycle. can help ensure that contracts are approved and signed by the appropriate parties in a timely manner. This can help prevent delays that may result in non-compliance issues.
- E-signature Tools:
Get your contracts signed instantly using LexzurSign powered by Adobe, AdobeSign, or DocuSign. streamline the contract signing process, reduce errors, and improve efficiency, while ensuring compliance with relevant e-signature regulations.
- Set Alerts & Reminders:
Stay on top of key responsibilities such as notice periods, renewals, or deadlines, and ensure that the right people are alerted at the right time. Configurable alerts and reminders can help ensure that key responsibilities such as notice periods, renewals, or deadlines are met in a timely manner, which can help prevent non-compliance issues.
- Repository and Meta-data:
Store and organize all your documents and contracts in a central, searchable repository, where you can access them securely, from anywhere. ensure that they are easily accessible when needed for compliance purposes. Properly tagged metadata can also help with compliance by ensuring that contracts can be easily searched and filtered based on relevant criteria.
- Custom Reports & KPIs:
Customize reports; expiring contracts, contracts awaiting signature, contract owners, contract values and more – all at the touch of a button. track key performance indicators (KPIs) related to compliance, such as the number of contracts expiring, the percentage of contracts signed on time, and more. This can help organizations identify areas where compliance can be improved and take corrective action as needed.
Why is Compliance so Important?
By centralizing contract data and automating key processes, CMS software can help businesses streamline their contract management operations and ensure compliance with legal and regulatory requirements. For instance, under GDPR, The General Data Protection Regulation, companies are required to include certain clauses in their contracts with data processors to ensure compliance with the regulation’s requirements. Using smart contract drafting templates, clause banks, and workflow automation tools can reduce risks and errors. Another example is HIPAA, The Health Insurance Portability and Accountability Act, compliance is essential to protect patient privacy and avoid legal liability.
Compliance isn’t all one shot, it’s an ongoing process of consistently meeting requirements set by the relevant authorities or industry standards, and continuously improving to ensure adherence to evolving regulations and best practices.
By providing visibility into contract data, storing contract data in a centralized system, businesses can easily track key contract terms and identify potential compliance issues. Additionally, you can configure automated reminders and notifications for contract expirations, compliance reviews, and so much more.
Another key benefit of having Contract Management Software is to demonstrate compliance efforts to regulators and auditors. By providing a centralized source of contract data, a CMS can make it easier for businesses to produce the documentation and reports needed to demonstrate compliance with legal and regulatory requirements.
Important to Consider
To be effective in ensuring compliance, businesses need to put the work in to adhere to best practices in conjunction with the software they’re using. The software cannot ensure compliance unless the team using the software conducts regular audits and training employees on compliance policies and procedures.
Also, not all CMS work the same or have the same compliance needs. You might find one software that is certified by GDPR, for example, but does not comply with HIPAA, and would not be the best choice if you’re working in the medical field. It’s important to evaluate the software thoroughly before implementation.
Conclusion
In general, though, having CMS will surely facilitate your compliance with legal and regulatory requirements, by centralizing data, automating processes, and providing visibility into contractual obligations, while avoiding penalties and reputational damage.
Ultimately, however, a CMS can be a powerful tool for businesses looking to ensure compliance with legal and regulatory requirements. By centralizing contract data, automating key processes, and providing visibility into contractual obligations, a CMS can help businesses streamline their compliance efforts and avoid costly penalties and reputational damage.
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